How are MPC covered call max profit and max loss calculated?

Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium. For the MPC covered call priced from the September 30, 2026 end-of-day chain at a 30-day expiry (ATM IV 46.70%), the computed maximum profit is $3,079.00 per contract and the computed maximum loss is -$38,920.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MPC covered call?

The breakeven for the MPC covered call priced on this page is roughly $389.21 at expiration, derived from the September 30, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The MPC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 13.39%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MPC implied volatility affect this covered call?

MPC ATM IV is at 46.70% with IV rank near 74.45%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

MPC Covered Call Strategy

MPC (Marathon Petroleum Corporation), in the Energy sector, (Oil & Gas Refining & Marketing industry), listed on NYSE.

Marathon Petroleum Corporation (MPC) functions as a prominent integrated energy enterprise, primarily concentrating its downstream operations across the United States. Its business is bifurcated into two main divisions: Refining & Marketing, and Midstream. The Refining & Marketing segment is responsible for processing crude oil and various other raw materials at its refineries, strategically located in the U.S. Gulf Coast, Mid-Continent, and West Coast regions. This division also acquires refined petroleum products and ethanol for subsequent distribution. Key outputs from this segment encompass a diverse array of transportation fuels, including different gasoline blends, heavy fuel oil, and asphalt.

MPC (Marathon Petroleum Corporation) trades in the Energy sector, specifically Oil & Gas Refining & Marketing, with a market capitalization of approximately $115.44B, a trailing P/E of 13.45, a beta of 0.53 versus the broader market, a 52-week range of 161.93-431.08, average daily share volume of 2.5M, a public-listing history dating back to 2011, approximately 19K full-time employees. These structural characteristics shape how MPC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.53 indicates MPC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MPC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on MPC?

A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income.

MPC snapshot

As of September 30, 2026, spot at $395.96, ATM IV 46.70%, IV rank 74.45%, expected move 13.39%. The covered call on MPC below is built from the September 30, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 16-day expiry.

Why this covered call structure on MPC specifically: MPC IV at 46.70% is rich versus its 1-year range, which favors premium-selling structures like a MPC covered call, with a market-implied 1-standard-deviation move of approximately 13.39% (roughly $53.01 on the underlying). The 16-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MPC expiries trade a higher absolute premium for lower per-day decay. Position sizing on MPC should anchor to the underlying notional of $395.96 per share and to the trader's directional view on MPC stock.

MPC covered call setup

The MPC covered call below is built from the September 30, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With MPC at $395.96 on that close, the first option leg uses a $420.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MPC chain at a 16-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 MPC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$395.96	long
Sell 1	Call	$420.00	$6.75

MPC covered call risk and reward

Net Premium / Debit: -$38,921.00
Max Profit (per contract): $3,079.00
Max Loss (per contract): -$38,920.00
Breakeven(s): $389.21
Risk / Reward Ratio: 0.079

Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium.

MPC covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on MPC. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$38,920.00
$87.56	-77.9%	-$30,165.22
$175.11	-55.8%	-$21,410.43
$262.65	-33.7%	-$12,655.65
$350.20	-11.6%	-$3,900.86
$437.75	+10.6%	+$3,079.00
$525.30	+32.7%	+$3,079.00
$612.84	+54.8%	+$3,079.00
$700.39	+76.9%	+$3,079.00
$787.94	+99.0%	+$3,079.00

When traders use covered call on MPC

Covered calls on MPC are an income strategy run on existing MPC stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.

MPC thesis for this covered call

The market-implied 1-standard-deviation range for MPC extends from approximately $342.95 on the downside to $448.97 on the upside. A MPC covered call collects premium on an existing long MPC position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether MPC will breach that level within the expiration window. Current MPC IV rank near 74.45% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on MPC at 46.70%. As a Energy name, MPC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MPC-specific events.

MPC covered call positions are structurally neutral to slightly bullish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. MPC positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MPC alongside the broader basket even when MPC-specific fundamentals are unchanged. Short-premium structures like a covered call on MPC carry tail risk when realized volatility exceeds the implied move; review historical MPC earnings reactions and macro stress periods before sizing. Always rebuild the position from current MPC chain quotes before placing a trade.

Frequently asked questions

What is a covered call on MPC?: A covered call on MPC is the covered call strategy applied to MPC (stock). The strategy is structurally neutral to slightly bullish: A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income. With MPC stock at $395.96 on the September 30, 2026 close, the strikes shown on this page are snapped to the nearest listed MPC chain strike and the premiums come straight from that session's bid/ask midpoint.
How are MPC covered call max profit and max loss calculated?: Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium. For the MPC covered call priced from the September 30, 2026 end-of-day chain at a 30-day expiry (ATM IV 46.70%), the computed maximum profit is $3,079.00 per contract and the computed maximum loss is -$38,920.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MPC covered call?: The breakeven for the MPC covered call priced on this page is roughly $389.21 at expiration, derived from the September 30, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The MPC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 13.39%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a covered call on MPC?: Covered calls on MPC are an income strategy run on existing MPC stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
How does current MPC implied volatility affect this covered call?: MPC ATM IV is at 46.70% with IV rank near 74.45%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.